Cumulative Software Return
Dr. Ivan I. Incisor and his wife Irene are married and file a joint return for 2020. Ivans Social Security number is 477-34-4321 and he is 56 years old (D.O.B. 7/18/64). Irene I. Incisors Social Security number is 637-34-4927 and she is 53 years old (D.O.B. 8/2/67). They live at 468 Mule Deer Lane, College Station, TX 77845.
Dr. Incisor is a dentist and he took 6 months off work to attend a cosmetic dentistry degree program in 2020. He is employed at Bitewing Dental Clinic. For two of those months he was considered unemployed and received unemployment compensation.
The Incisors have a 12-year-old son (D.O.B. 2/15/2008), Ira, who is enrolled in the 6th grade at the Perpetual Perpetuity School. Iras Social Security number is 690-99-9999. When Irene began her Schedule C business, day care was needed for Ira after school. The Incisors paid $4,000 to a Day Care Center. The Day Care Center was (Humpty Dumpty, 100 College Station, TX 77845 Tax Id 38-0000000) The Incisors also have a 19 year-old daughter, Iris, who is a part-time freshman student at Snow Mass Community College (SMCC). Iris Social Security number is 899-99-9999. Iris is married to Sean Slacker (SS No. 896-33-0954), who is 19 years old and a part-time student at SMCC. Sean and Iris have a 1-year-old child, Seth Slacker (SS No. 648-99-4306). Sean, Iris, and Seth all live in an apartment up the street from Ivan and Irene during the entire current calendar year. Sean and Iris both work for Seans wealthy grandfather as apprentices in his business. Their wages for the year were a combined $50,000, which allowed them to pay all the personal expenses for themselves and their son. Ivan and Irene heard about the new $500 other dependent credit and were hoping to claim their daughter Iris.
Ivan went to a local casino and won $6,000 playing Keno on 7/04/2020. Ivan had no other gambling income or loss for the year. This amount was reported on the W-2G. The winnings were reported to Texas State Lottery Commission, Austin, TX. (fed id 38-1238790). There was no federal taxes withheld.
In February, Irene received $50,000 in life insurance proceeds from the death of her friend Sharon.
In July, Ivans Uncle Igor died and left him real estate (undeveloped land) worth $72,000.
In March of 2008 Ivan loaned a friend (Bob Borrower) $10,000. This debt was evidenced by a written note and Bob was supposed to repay it in 2020. In 2020 Bob filed for bankruptcy and the debt is completely worthless.
Ten years ago, Ivan and Irene were divorced. Ivan then married Mary Molar, but that marriage did not work out and they were divorced a year later. Eight years ago, Ivan and Irene were remarried. Under their divorce decree dated 12/12/2011, Ivan pays Mary $13,000 per year alimony. All payments were made on time during 2020. Marys Social Security number is 667-34-9224.
Bitewing Dental Clinic, Inc., pays Ivans dental license fees and membership dues to dental organizations. During 2020, Bitewing paid $1,240 for such dues and fees for Ivan.
Ivan and Irene paid the following in 2020 (all by check or can otherwise be substantiated):
Interest on Ivans dental school loans-Form 1098E-Country Mortgage-Box 1 $2,500
(Ivan carried a half course load in 2020, and the loan was for tuition. The loan Interest paid in 2020 related to the tuition from the 2020 year).
Tuition paid in 2020-Assume that Ivan took these courses to maintain and improve his existing skills as a Dentist. This amount was reported on the Form 1098-T. (See attached Form 1098-T). This was the first time Ivan has used any education credits.
Ivan has not been convicted of any felony drug offense.
Determine the tax effects of the education expenses of $10,000
On June 17, Ivan purchased a new Professional HDV Camcorder for $17,000. While the Incisors were on vacation from 8/22-91/20, someone broke into their residence and stole the Camcorder. Ivans area was declared a major disaster area due to Hurricane Laura that occurred during this time period. The FEMA disaster declaration number was DR-4572-TX. There were several houses where there was looting. Ivans homeowners insurance did not reimburse him for any part of the loss since he declined the special premium add-on for high value items required by his policy. Ivan also filed a police report.
For the 2020 tax year, on March 15, 2020, Ivan contributed $5,000 to a traditional IRA for himself and $5,000 to a traditional IRA for his wife. He is not covered by a qualified retirement plan at work.
Ivan owned 1,000 shares of Behemoth Airline stock with a basis of $30 per share. The stock was purchased 12 years ago on June 10, 2007. Ivan sells 500 shares of Behemoth stock to his uncle Seth and 500 of the shares to his sister Sara for $5 per share on December 31, 2020. There was no 1099-B for the two sales above.
Form 1099 Bs related other personal investments and all other tax forms are provided below. Assume that there were no capital loss carryovers.
(Refer to the attached tax forms along with other information below for other deductible expenses or inclusions in income)
When entering on Intuit software assume the basis was not reported on the Form 1099-B for any of the sales
Ivan purchased 5 acres of land in Reno, NV, 13 years ago on 10/25/2004. His basis in land was $75,000. On December 31, 2020, he sold that land for $200,000 on the installment method to an unrelated party. Ivan received $45,000 in the year of sale, and the balance was payable at $15,500 per year for the next 10 years, plus market rate interest. The Incisors did not owe any money on the property. No interest will be received until 2020 since the sale was not made until December 31.
On May 15, 2020, Ivan and Irene sold their personal residence for $540,500 and purchased a new house for $725,000. There address was 587 Mockingbird Lane in College Station, TX 77845. They moved to their present address. Assume that there were only $500 in expenses for the sale since they did not use a realtor. They had owned the old house for 25 years. (Purchased on 6/10/92). It had an adjusted basis of $500,000 (Purchase price). Assume that they had no capital improvements on the home sold and that they wish to exclude the maximum gain available. Also assume that the Form 1099-S was received for the sale of the home. They received full payment for the sale. The house had been their personal residence for all the years they were married. They moved into the new house on May 18, 2020. Immediately after the purchase the Incisors Invested $10,000 in energy efficient solar panels and $5,000 to heat the existing swimming pool. The Incisors want to deduct the maximum possible for the Residential Energy Credit. Assume the Incisors have never taken these type of credits before.
On September 1, Irene opened a retail store that specializes in sports car accessories. She materially participated in the business.
The name of the store is Plus Two Comes. (EIN 38-0903267) The store is located at 617 Main Street, College Station, TX 77845. The store uses the cash method of accounting. Her income and expenses for the year are as follows: Assume that Plus Two Comes uses the cost method for its inventory.
On December 12, Irene purchased the building (non-residential real estate) where her store is located. She paid $340,000 for the land and building. The building was valued at $240,000 for the land was valued at $100,000. Irenes store is the only business in the building.
In addition to the above items, Irene incurred travel expenses to attend a seminar on sports car accessories. She spent $300 on airfare, $400 on lodging, $100 on a rental car, and $150 on meals. Irene has proper receipts for these amounts.
Irene drove her 2004 Ford Explorer (placed into service on 6/01/2005) 1,634 miles for business, driven after September 1, 2020, related to Plus Two Cones. The Explorer was driven a total of 17,000 (business and personal for the year). Included in the 17,000 is 5,000 miles spent commuting to the store. Irene has the required substantiation for this business mileage. She uses the standard mileage method.
The Incisors own a rental beach house (single family residence) in Hawaii. The beach house was rented for the full year during 2020 and was not used by the Incisors during the year. The Incisors were active participants in the management of the rental. Pertinent information about the rental house is as follows:
The house is fully depreciated so there is no depreciation expense.
Required: Prepare the 2020 Federal Income Tax Return for Ivan and Irene Incisor using Intuit Software. Save as a pdf file and upload the For Filing pdf to the blackboard.
Make sure the following you have the following forms prepared.
Form 1040 along with the 1040 Schedules 1, 2 and 3
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
The background and/or significance are missing. No search history information is provided.
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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Cumulative Software Return assignment